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Bill To U.S. Economy For Power Outages Seen In The Billions

Jan 13, 2005

By Agence France-Presse The bill to the U.S. economy for the largest power outages in the country's history could run up to $30 billion a day, economists estimated Aug. 15. Car assembly lines remain idle and utility plants remain off line Friday, one day after a massive power outage struck large swaths of the eastern U.S. and Canada. "Maximum impact under this scenario, in our view, is approximately $25 billion to $30 billion a day in terms of lost gross domestic product," says Merrill Lynch chief U.S. economist David Rosenburg. Economists said, however, that power supplies are expected to be restored soon, and thus the long-term damage to the economy should not be too crippling. "The bottom line, in our view, is that when a quarter of the country is shut down, which we are practically at risk of doing, it basically shaves off roughly 1% from gross domestic product growth at an annual rate," says Rosenburg . The biggest impact is expected to be on the nation's industrial production, particularly car and truck output, which is clustered around southeastern Michigan and Cleveland. Many of Detroit's car plants are idling as utilities scramble to restore power. "The blackout will eventually affect many U.S. economic statistics, including industrial production, retail sales [and] manufacturing output," adds Dana Saporta, an economist at Stone and McCarthy in New Jersey. Copyright Agence France-Presse, 2003